SDKK Secure Design

RNS Number:8740H
Secure Design KK
16 November 2007



                     FOR IMMEDIATE RELEASE 16 November 2007


                                Secure Design KK


                       Acquisition of 53.9% of Beyond LSI


Secure Design KK ("Secure Design" or the "Company"), the Japanese developer of
biometrics fingerprint authentication technology, announces that it has reached
an agreement to acquire 53.9% of Beyond LSI Inc ("BLSI"), a Japanese company
which provides biometric fingerprint solutions for a wide variety of
applications, such as cell phones, personal computers and physical access to its
technologies for algorithms, LSI and embedded network systems.


BLSI was established by members of the Tokyo Institute of Technology.


Under the terms of the acquisition Secure Design will acquire 324 BLSI shares
representing 53.9% of the BLSI voting capital for a total consideration of JPY
73m (GBP 327,354). The consideration will be satisfied by a cash payment of JPY
13m (GBP 58,296) and the issue of 2,000,000 new Secure Design ordinary shares
(the "Consideration Shares"), representing approximately 4.9% of the enlarged
share capital of the Company. The Consideration Shares rank pari passu with the
existing ordinary shares.


The vendors include Japan Asia Investment Co., Ltd. ("JAIC") and Dr. Hiroaki
Kunieda, both of whom will become shareholders in Secure Design. The remaining
46.1% BLSI shares will be retained by Dr. Hiroaki Kunieda, BLSI management and
staff.


The transaction is conditional upon admission of the Consideration Shares to
trading on AIM, which is expected to take place on or before 12 December 2007.


In the year ended 30 June 2007, BLSI reported a loss before tax of JPY 34.6
million (GBP 155,157) on turnover of JPY 48,841,515 (GBP 219,020). At 30 June
2007, BLSI had net assets of JPY 47,922,592 (GBP 214,900).


Exchange rate used throughout this announcement: 1GBP = 223 JPY


Rationale for the acquisition


Secure Design is seeking to integrate several vendors' fingerprint
authentication technologies, which comply with ISO/IEC standard, in order to
increase its market share. The short term business goal is to become the major
supplier of this technology in Japan by leveraging Secure Design's growing
expertise. The Company has also established an alliance with Oriental Technology
System in Taiwan and Sanyo Semiconductor in Japan to develop a next generation
ultra thin semiconductor fingerprint image sensor that can be also used on smart
cards.


BLSI has developed Application Specific Integrated Circuits (ASIC) for
fingerprint authentication for smartcards, and has started delivering the ASIC
to major Japanese card companies in the Japanese traffic ticketing card market.
This is an important technology for Secure Design and acquiring BLSI saves time
and resource in developing biometric smartcards. Secure Design has delivered its
technology to another major Japanese card company which has a large share of the
Japanese financial card market. The Directors estimate that the combined
companies will have around 70% of the Japanese card market and Secure Design
will be in a position to provide its biometrics smartcard solution to them
following the acquisition. The Directors believe that it will bring a
significant advantage in dominating the domestic market and provide technology
leadership in this field.


The Tokyo Institute of Technology is recognised as one of the leading technology
institutes in Japan, similar to the Massachusetts Institute of Technology in the
US. As the directors of BLSI and the R&D staff also work for the institute,
Secure Design will be able to utilise the highly qualified academic and
industrial R&D resources.


This acquisition is in line with Secure Design's long term goal of becoming a
global provider of fingerprint authentication products and services. The
acquisition of the BLSI brand name, its ASIC products and R&D development
resources will reduce Secure Design's development cost and the time involved in
finding new biometrics smartcard solutions. In addition, expansion of the sales
network by the acquisition should enable Secure Design to increase both sales
and profits as it will open up new markets for its existing range of products.


For further information, please contact:

Secure Design KK

Taketoshi Kashiwabara                                   Japan +81-3-3516-9303

(Chairman)

Masahiro Nishikawa                                      Japan +81-3-3516-9360

(Executive Vice President, Business Planning)

Kaoru Wako                                              Japan +81-3-3516-9303

(Chief Financial Controller)

Shinil Cho                                United Kingdom +44 (0) 7738 842 662

(Chief Information Officer)                             Japan +81-3-3516-9303

                                                United States +1-412-367-7063


Charles Stanley Securities                               +44 (0) 20 7149 6000

Nominated Adviser

Russell Cook / Freddy Crossley


Cubitt Consulting                                        +44 (0) 20 7367 5100

Brian Coleman-Smith / James Verstringhe





Background Note on Secure Design

On 14 July 2006, Secure Design was the first Japanese company to be admitted to
trading on AIM. It offers fingerprint authentication products to companies and
individuals that wish to establish high levels of security using biometrics.
Biometrics uses a physical attribute of the body, such as a fingerprint to
identify and verify the individual with the aim of making individual
authentication efficient and secure.


The Company offers a range of fingerprint authentication products and systems,
from an integrated system to a mobile device. The Company designs and outsources
the production of these products and can tailor them to individual client
specific needs and applications.


Biometric applications provide convenient and reliable security which reduces
the cost associated with the failure of conventional authentication methods. The
principal factor which distinguishes biometrics from conventional password based
authentication is the enhanced security level it provides while maintaining the
privacy of individual users.


The worldwide demand for biometrics is estimated to increase from just over $3
billion in 2007 to over $5.6 billion by 2010.*

*Biometrics Market and Industry Report 2007-2012



Background on BeyondLSI


BeyondLSI (BLSI; http://www.beyondlsi.com/index.html) group provides biometric
fingerprint solutions for a wide variety of applications.


The group includes the following four companies: BLJ (BeyondLSI, Japan), BLC
(BeyondLSI, China), BLK (BeyondLSI. Korea), and BLA (BeyondLSI, American Rep).


The present BLSI group technology is an original fingerprint authentication
algorithm based on a research from Kunieda VLSI Laboratory of the Tokyo
Institute of Technology.






                      This information is provided by RNS
            The company news service from the London Stock Exchange

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